Answer to Question #196611 in Financial Math for Milton

Question

first one has expected return μ1 = 20% and standard deviation of return equal to σ1 = 10%. second has expected return μ2 = 40% and standard deviation of return equal to σ2 =20%. Next we want to determine the range of μ4 and σ4 such that Asset 4 dominates Asset 2, but does not dominate Asset 1. After careful calculation, and checking our result by drawing a graph .we know that Asset 4 dominates Asset 2 and not Asset 1 if and only if the expected return of Asset 4 is __________ 

(larger than or equal to the expected return of Asset 2./smaller than or equal to the expected return of Asset 2./smaller than the expected return of Asset 2./larger than the expected return of Asset 2./larger than that of Asset 1 and smaller than that of Asset 2.

/larger than or equal to that of Asset 1 and smaller or equal to that of Asset 2./larger than or equal to the expected return of Asset 1./smaller than or equal to the expected return of Asset 1./larger than the expected return of Asset 1.)